Pennsauken, New Jersey-based PrimeSource Corporation, a supplier to the printing and publishing business, refinanced its existing $75 million credit with PNC Capital Markets early this month as the company's outstanding loan was set to mature this May. William De Marco, cfo, said the company's new facility will replace the last one, signed in 1996, and participants also include Mellon Bank, First Union, FleetBoston Financial and National City Bank.
De Marco said the company's new credit has no set pricing as the pricing is tied to a grid of spreads based on many covenants and ratios. "There is no fixed spread," said De Marco, explaining that pricing will go down as overall company leverage decreases. Pricing on the company's five-year, 1996 facility was LIBOR plus 13/4 % and De Marco said pricing on the new credit was based on investment grade standards. The loan has not been formally rated. In response to whether or not the company had difficulty refinancing the competitvely priced, investment grade revolver, he said, "We offered it to five banks and they all anted up," explaining that the company did not feel the pinch from a tough pro rata market. The loan will be used for future corporate purposes. "It's more than we need day to day, but we've factored in for potential growth," he said.